In today's competitive marketplace, customer satisfaction is one key for business success. To this end, many manufacturing companies are undergoing re-engineering processes as they search for ways to provide high quality, low cost, and just-in-time service. Achieving such manufacturing excellence requires many interrelated activities, such as supply-chain management, logistics modeling, production planning, scheduling, control, and breakthroughs or improvements in technology.
Part procurement and inventory control also play an important role in the manufacturing process. For example, a shortage of parts can disrupt production schedules, lower serviceability, cause product shortages, or lead to customer dissatisfaction. Excessive inventory, on the other hand, can not only increase manufacturing, storage and transportation costs, but also hurt a market value of a product. Accordingly, a strategy is needed which can maintain an optimal balance between part procurement and inventory control, thus allowing a company to maximize its serviceability (or responsiveness to demand variation) with minimum inventory.